Kurtz: Where’s the Coverage of Washington’s Role in GM’s Mess?

Howard Kurtz, now over on Fox News, raises the question about why coverage of GM’s recall has largely ignored the Washington angle:

. . . The federal government is complicit is more ways than one.

GM, you’ll recall, had to be rescued by the taxpayers in 2009, and the federal stake was so large that the company was dubbed Government Motors when it went through bankruptcy. But bankruptcy rules require a disclosure of all liabilities as well as assets. By hiding the defect in its cars, GM may have committed bankruptcy fraud.

Beyond that, the utter failure of the National Highway Transportation Safety Agency to crack down on the defective ignition switch is an embarrassing failure. But regulatory agencies are a journalistic backwater, drawing a fraction of the coverage lavished on the White House, Congress and politics.

Allow me to submit another motive in the media’s disinterest: The massive GM recalls — now more than 6 million vehicles — would require the media to revise a major storyline from a few years ago — the near-collapse, bailout, and resurrection of General Motors, which has largely been covered as an unvarnished success story for the Obama administration. He writes, “You can’t single out President Obama because the government’s failure to act stretches back to the Bush administration, so it doesn’t make for a left/right slugfest.” That’s true enough as it goes, but the Obama administration somehow missed these multiple massive safety issues while putting together the bailout, which ultimately poured $49 billion into GM, and cost taxpayers $10.5 billion once the last share of stock was sold. Hammer the NHTSA, but at what point does the President’s Auto Industry Task Force look negligent? How did they miss so many consequential lurking safety issues in what was allegedly a thorough review of the company?

In another example of the phenomenon discussed in this piece, a wide variety of voices who are quick to lambaste “corporate greed” and “evil businessmen” — be it Wall Street, Big Oil, Big Tobacco, health-insurance companies, or any one of many others — are strangely quiet about a car company that manufactured and sold cars with a fatal defect. Why? Because progressives don’t begin from the principle, “a company must make safe products to be a good company.” They begin with “Barack Obama is the good guy.” Barack Obama supported and enacted the bailout of GM, thus that bailout must be a good thing. Thus, GM must be a company worth helping. Acknowledging that GM made dangerous cars, lied about it to the public, and then had the audacity to ask the taxpayers for money while keeping the danger of the cars secret would disrupt the “GM is worth helping, and Obama was right to help them” narrative, so it must be ignored, shoved aside, eyes averted, and so on.

UPDATE: Finally, over in the Guardian of the U.K., some tough coverage of Washington’s role in this, from economics columnist Heidi Moore:

Four years later, in December 2013, GM seemed to justify the cost — and faith — of its bailout. When the US Treasury sold its remaining stake, President Obama wrapped the moment in misty-eyed rhetoric about national pride:

When things looked darkest for our most iconic industry, we bet on what was true: the ingenuity and resilience of the proud, hardworking men and women who make this country strong. Today, that bet has paid off. The American auto industry is back.

We were desperate to believe this.

Less than four months later, it seems foolish that any of GM’s fairy tale was believable to anyone. After the recalls and the estimates of driver deaths, all of that talk — of the reborn American automaker, of bets paid and dollars won — seems like a hollow spectacle.

And it has to make us wonder: how much were US taxpayers and the government complicit in sustaining a company that researchers had already suggested was unable to compete in the modern automotive industry?

“It’s no ‘new GM’ if they’re doing this,” Dartmouth Tuck School of Business professor Paul A Argenti tells me. “If this has been hidden for 10 years, there’s nothing new about the company. It’s old-school GM. It’s stuff you can’t even imagine a company could do in the 21st century.”

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